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The US dollar has been rallying quite a bit. If i want to bet on a short term correction, what can I do? I dont want to buy inverse ETF since they track the underlying on a daily basis. I want something that will track USD at least on a weekly basis.

Is there something like buying a put option on USD?

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    USD versus what other currency or basket? – Yosef Weiner Feb 11 '15 at 16:56
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    Buy euros or pounds? – Joe Feb 11 '15 at 17:01
  • @SkinnyJ:Good question...when analysts say, that USD is in an uptrend, what do they mean? against gold? – Victor123 Feb 11 '15 at 17:37
  • Against other currencies generally I suppose, though usually when I see them say that they have a specific target. Currency has no value in and of itself, it's just what it can buy or is worth against other currencies. I don't think gold would be a very good thing to compare the dollar to - it has other reasons for moving than just the dollar's weakness. – Joe Feb 11 '15 at 18:04
  • You might mean the USDX index. In that case you can trade it as a future or ETF, and probably as a CFD if you're not a US Person. Or as Joe said, you can buy the basket of currencies in the USDX. – Yosef Weiner Feb 11 '15 at 18:27
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If you think that USD will fall against another currency, let us say EUR, a quick solution is to buy a currency ETF. Check for example:

http://etfdb.com/type/currency/all/

Another solution is just buy EUR or the other currency.

If you want to do it with leverage, but without the daily leverage resets of the leverage ETF (not sure why you want to avoid them) then you can buy the ETF on margin.

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    Good answer. Though I would add currency etfs are significantly more complicated than equity etfs as they generally use and have to roll forwards or futures. It is worth reading up on how the etf works and checking how well it tracks with its currency basket. Leverage ETFs are troublesome in general because they often have inherent strong drifts that work against the long-term investor. – rhaskett Feb 11 '15 at 21:31
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Ways to short a currency in the financial markets can be but not limited to:

  • Forex, Futures, CFD, Options, ETF/ETC, Stocks

Concerning the US Dollar index (wikipedia link) , its a basket of currencies

Euro (EUR), 57.6% weight
Japanese yen (JPY) 13.6% weight
Pound sterling (GBP), 11.9% weight
Canadian dollar (CAD), 9.1% weight
Swedish krona (SEK), 4.2% weight
Swiss franc (CHF) 3.6% weight

You can easily rebuild that in the FX markets or with FX-options, or eventually directly trade the basket through options, futures, CFD, ETF.

However, picking the currencies/instruments one by one vs an index has the advantage that you can scale the bet more precisely.

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